Contnt Area D Flashcards
1
Q
Give 2 examples of internal sources of finance
A
Retained profit
Sale of assets
Net current assets
2
Q
Disadvantage of loans
A
Interest charged the amount borrowed
Often secured against an asset
3
Q
What is trade credit
A
A period of time offered by suppliers to allow the customer to purchase the item now and pay for it later
4
Q
What is debt factoring
A
When business sells its debt to a third party in order to receive quick cash
5
Q
2 advantages of invoice discounting
A
No loss of ownership or control
No interest charges
6
Q
Venture capital advantage
A
Will get professional advice and mentoring
7
Q
2 disadvantages of mortgages
A
Interest rates can fluctuate
Not suitable for short term
Interest charged on amount borrowed
